The adage "you have to spend a buck to make a buck" holds true, according to a new study of small business owners and accountants. Intuit Inc.'s annual "Voices of Small Businesses and Accountants Study" found that 64 percent of businesses and 73 percent of accountants who invested in their business reported growth in the last 12 months.
"Investing in your business or in your accounting firm may sound like common sense, but it's often a scary proposition when things look uncertain in the economy," said Jill Ward, vice president and general manager of Intuit's Accountant Central group. "Those with the foresight to invest, however, are clearly doing better than those who don't invest."
The most common investments made by both groups included:
- Increasing advertising or marketing efforts (40 percent).
- Hiring new employees (25 percent).
- Acquiring new technology (23 percent).
- Offering new products or services (20 percent).
Accountants also invested in their ongoing education and training. Totals exceed 100 percent because respondents could select more than one answer.
Accountants Help Businesses Grow
As in previous years, the study found that business owners working with an accountant were more likely to describe their growth as "significant" than those who did not.
The study also found that businesses rely on their accountants for more than just tax preparation and day-to-day bookkeeping. Forty-nine percent of business owners said their accountants helped them better understand their business or implement new technology to improve performance. In addition, 62 percent of business owners said they looked to their accountant to help find ways to save time and money.
Accountants recognize this increasing role. Sixty-five percent of them said their clients needed consulting services beyond traditional tax preparation and bookkeeping. And 30 percent of accountants said that they added at least one new service to their firms as a result of client demand.
"Every client is unique and filling their accounting needs requires offering more than just bookkeeping. I am trainer, advisor, technology consultant and a solutions provider," said Betty Colston, Certified QuickBooks Professional Advisor(R) and President of Colston Enterprise. The more services I propose to the clients, the more they're willing to spend working with me."
Other findings include:
- Seventy-two percent of business owners are optimistic about the future of their businesses and their industry; 76 percent of accountants feel the same way.
- Tax (78 percent) and bookkeeping (37 percent) remain among the most requested accounting services by businesses.
- Sixty-three percent of business owners say that dealing with customers takes up most of their time. Fifty-nine percent of accountants say the same thing about dealing with clients.
Challenges for Businesses and Accountants
In addition, the study asked participants to discuss their most pressing challenges. For small business owners, the list includes generating new business and revenue streams, dealing with rising insurance costs and keeping up with competitors. Accountants said they're faced with how to better manage their time in order to be more productive, managing employees and keeping up with technology.